Trimming the Fat

When Cambria Suites owners expressed concerns that they weren’t making money on food and beverage, the brand realized it was time to create a new program that would decrease costs, improve the guest experience, and turn the restaurant into a profit center.

The original food and beverage concept, which was first introduced when the upscale all-suites brand from Choice Hotels launched in 2005, featured a menu designed around healthy food and healthy choices. “The problem was that’s what our customers say they want, but it’s not really what they eat,” says Michael Lusick, director of brand operations for Cambria. “Our menu wasn’t well received. People said the food was good but no one really wanted to eat there.”

After a year of research into restaurant and consumer trends, Cambria introduced a new approach last May that emphasizes American comfort cuisine and encourages cross-utilization of ingredients to make food preparation more efficient. Highlights include made-to-order gourmet burgers, shareable appetizers, locally inspired dishes, and craft beers. The roll out of the program across the brand’s 19 franchised properties should be complete by late February or early March. Michael DeMaria, chef and co-owner of M Culinary Concepts, helped develop the program and oversaw staff training to ensure accuracy and consistency in the recipes.

Choice is investing $250 million in Cambria Suites to help developers and owners get hotels built. Lusick says the “fun, fresh, and familiar” menus are competitive differentiators for both the brand and investors. “In the simplest form, the food and beverage program just helps make that investment more profitable,” he says.

Food and beverage is the second largest source of revenue for most full-service hotels, but restaurant sales are still lagging behind pre-recession levels. In response, many hotels are reinventing their dining models to meet consumer demand for value and high quality, fresh food in a casual environment, while also improving operational efficiency. Brands are embracing quick-service restaurants, grab-and-go kiosks, simplified menus, cross-utilization of ingredients, smart design, and other tactics to generate more profits for owners and more importantly, to control expenses.

Less Waste, More Savings
Cambria Suites’ new food and beverage program generates an average of $18,000 to $20,000 annual increase in profitability from improved food costs at existing properties. That’s about a half a percentage point in gross operating profit, Lusick says. Owners have also noticed an uptick in room service during the week. “We’re offering something that’s a differentiator,” he says, “but we haven’t run up the operating cost to do it.”

Cross-utilization allows Cambria’s culinary teams to make better use of ingredients and decrease waste. Although the menu is simple, it still offers variety without increasing cost or inventory. “In a restaurant, especially a low volume restaurant, one of the biggest challenges is how you provide variety without having a lot of waste as a result,” Lusick says.

And as the Midwest struggles to bounce back after the most severe and extensive drought in 25 years, the cost of food is rising across the country. “If you’re going to keep your food costs down, you need to maximize items, and eliminate your waste,” says Dennis Gemberling, president of Perry Group International, a firm that provides consulting, management, and hotel and restaurant expert services. “It’s a matter of survival right now.”

Cambria also improved the presentation and adjusted the quantity of items in its grab-and-go food retail section to drive additional revenue. Now the sandwiches, salads, yogurt parfaits, and pastries are quickly moving off the shelves. “It allows us to provide quality food and beverage around the clock,” Lusick says.

Quick items like sandwiches and salads have greater turnover, which yields additional savings as the quantity of products bought and sold increases. “That allows you to provide some affordability on the menu price,” Gemberling says, “which is attractive to the guest to possibly grab something in your hotel whatever time of day it is versus going out elsewhere.”

Another benefit of the program is that it doesn’t require hiring additional staff. “We had to do it with the tools we had,” Lusick says.

Quick and Convenient
According to a recent Mintel survey, sales at quick-service restaurants have increased to nearly $30 billion in the past five years. Hilton Worldwide noticed that hotel guests are spending less time in fine dining restaurants in favor of quick and convenient items instead. That’s why the company introduced three new casual dining concepts for Embassy Suites, DoubleTree, and Hilton Hotels & Resorts that will debut in the United States this year. The concepts are optional to owners.

“People are more savvy today, and to ignore that would not be smart on our part,” says Beth Scott, vice president of food and beverage concepts for Hilton Worldwide.
“Fast dining allows hotels to capture guests who want something simple and quick as opposed to having a full-service restaurant where you’re forcing guests to ‘wine and dine,’ so to speak, off a certain fixed menu,” Gemberling says. “A fast-casual menu lends itself well to all-day dining.”

Brickstones Grill was created so Embassy Suites owners and operators can continue with the brand’s successful complimentary cooked-to-order breakfast and nightly manager’s reception, and make lunch and dinner more profitable and efficient. While some Embassy owners have leased their restaurant space to a third party, others have faced the challenge of developing their own restaurants. The responsibility of running a full-service restaurant, in addition to a separate breakfast area, resulted in operational headaches.

“Some Embassy owners are now, for the first time, coming into the full-service hotel world,” Scott says, “and are not really comfortable with food and beverage.” Brickstones offers a contemporary experience that easily transitions from breakfast to à la carte American dishes, cooked in a brick pizza oven, open pit grill, and rotisserie, for lunch and dinner.

One way to trim the overall cost when retrofitting or designing a restaurant is to reduce the footprint of the kitchen and dining room. “If you think about it in terms of return on investment, you’re going to experience the same sales,” Gemberling says. “If a hotel has 200 rooms, it’s 200 rooms, whether it has 4,000 square feet of foodservice space or 2,000. You’re going to generate the same activity, typically.”

Brickstones, which has an open display kitchen, reduces Embassy’s restaurant space by 2,000 square feet, and combines all food and beverage offerings in one location. “From just a cost to build perspective, we’ve got one kitchen that services everything for the hotel,” Scott says, “so we’ve not only reduced the footprint but also reduced the capital cost for the owner by close to $500,000.”

For DoubleTree, Hilton envisioned a relaxed, approachable, all-day eatery that combines the ease of a market with the allure of a brick oven gastropub. Flexible components transform the space from day to night. For instance, the breakfast menus flip around to reveal panini machines and sandwich menus.

“In terms of the operator, there are some cost savings,” Gemberling says of implementing fast-casual restaurants. “When you work with a fast-casual menu and all-day dining as opposed to one specific meal or dinner-style menu it allows hotels to operate with simpler staffing.”

Herb N’ Kitchen is an option for Hilton Hotels & Resorts owners searching for an alternative to the traditional sit-down, full-service experience. It infuses gourmet items into a retail experience and gives guests a transparent view of the kitchen. The upper-upscale approach allows guests to watch as gourmet salads, sandwiches, and flatbread pizzas are made fresh in front of them, or grab-and-go if they choose. The self-service model offers hotels flexibility to transition from lunch to dinner and may include a variety of zones, including a bar, barista, and made-to-order station.

“It’s saving owners money on the up front,” Scott says, “and also the service model is so different that we can prove some economic savings on the operating side as well.”